Financial Crime World

Headline: Skyrocketing Cyber-Crime: PwC Report Reveals 63% of Eastern African Businesses Fallen Victim in the Last Two Years

Subhead: A Growing Concern: Digitalization Leads to Cyber-Attacks, Money Laundering, and Insider Trading

August 1, 2023

The 2022 Economic Crime and Fraud Report by PricewaterhouseCoopers (PwC) released last week raised serious concerns when it uncovered that an alarming 63% of businesses in Uganda and the entire East African region had experienced economic crime and fraud over the past two years.

The Crisis Unveiled: Eastern African Businesses Under Threat

Mr. Muniu Thoithi, PwC’s advisory and forensics leader for eastern Africa, addressed this growing concern during a press conference:

“Two-thirds of eastern Africa respondents had experienced fraud within their organization.”

Types of Fraud Reported

The report pointed out that respondents from the region reported higher incidences of various types of fraud:

  • Customer fraud: 24%
  • Asset misappropriation: 21%
  • Procurement fraud: 21%
  • Bribery and corruption: 19%

Although less frequently reported, instances of human resource fraud (5%), tax fraud (4%), government relief fraud (3%), and ESG reporting fraud (2%) were still a concern for eastern African businesses.

Cyber-Crime: The Biggest Concern

Cyber-crime posed the most significant threat, accounting for 22% of reported incidents:

“It is not surprising we are seeing an increase in cyber-crime disruption and customer fraud." Mr. Muniu Thoithi

Targeted Industries

The financial industry, with 47% of respondents, suffered the most from these attacks:

“Cyber criminals in the region have become increasingly sophisticated with fewer but more lucrative attacks.” Mr. Muniu Thoithi

Combating the Threat: Necessary Measures

As digital payments and remote working become increasingly popular in Uganda, Wilbrod Owor, Uganda Bankers Association executive director, emphasized the importance of taking cyber-crime seriously:

“East Africans, and Ugandans in particular, are becoming prime targets, putting the goal of a cashless economy at risk.” Wilbrod Owor

Government Action

The East African government’s involvement in economic crime and fraud was cited as the most common mode of perpetration according to Mr. Lawrence Semakula, Accountant General, despite recent salary increases.

Stricter Regulation and Penalties

The Ugandan Communications Commission’s (UCC) concerns about economic crime were reinforced by the findings in the PwC report. In response to these threats, the recently passed Security Docket regulation aims to tackle financial crimes through harsher penalties.